The Impact of Redistribution on Income Inequality in Canada and the Provinces, 1981-2010

Andrew Sharpe and Evan Capeluck

No 2012-08, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: This report provides an overview of trends in income inequality, measured by the Gini coefficient, in Canada and the provinces over the 1981-2010 period, and investigates the impact of redistributive policies — taxes and transfers — on these trends. Canada's after-tax income Gini coefficient was 0.395 in 2010, 23.7 per cent lower than the market income Gini of 0.518, with 70.7 per cent of this reduction due to transfers and 29.3 per cent due to taxes. Between 1981 and 2010, market income inequality rose substantially, but redistribution offset 44 per cent of the increase. Counter to popular perception, after-tax inequality has remained virtually unchanged since 2000.

Keywords: income inequality; Gini coefficient; Canada; redistribution; taxes; transfers; provinces; market income; after-tax income (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-ltv and nep-pbe
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